Manufacturing cost of a Ferrari?

I dont know the actual cost break out... thats most likely in house secret... but I would think that true cost is somewhere like 35 - 50% of the wholesale cost... I think most dealers are making $15K to 30K depending on model... that is gross... I have no idea about net... $7-10 K per car... Enzo etc... would be a special case.. whats nice is you know you can charge what ever you like when your production is much lower than demand....

 

Could there perhaps be an analogy to the high-end watchmakers here? Both products are sold in limited quantity, sometimes almost under a "bidding war" scenario by the customers, and are both handmade to very high standards.

Isn't it true that a low production hand-made item has to sell for a relatively huge Gross profit in order to provide enough of a total Net profit to keep the maker and the distributors in business?

When I was with a similar (not watch or car, though) business, we figured 25% for the manufacturing cost; just to allow for marketing, sales, distribution, service, taxes, and hopefully an eventual profit...

James

 

The cost of manufacture is less relevant to a low-volume manufacturer, due to the high cost of development having to be amortized over very few units. Even more dominant in Ferrari's case is the cost of their F1 program, which is about $300M.

 

Wait, didn't Ferrari get "taken over" by Fiat? I thought sometime in the 80s Fiat took over and left Enzo in charge of racing (his passion) and "controlled" the production of mass market cars.

Did Fiat bow out? Did Ferrari go private? If not, then the real costs of each car should be divided by the total production of Ferrari + Fiat (like the BMW example above).

Just curious,
James in Denver

 

This is not unlike the $50,000 steering wheel thread in the Racing section. A lot depends on where you assess the expenses. If you took apart, say, a 360 and totaled up the value (wholesale) of the parts, then that would be one way. But that omits a lot of the steps. You have to consider development all the way back to the conceptual stages. Any changes to production equipment. And so on.

 

I remember an article by Lee Noble saying that he felt a 360 Ferrari was worth £70,000 retail and that anything over that was payment for the badge. At the time a 360 was about £110,000.

Large manufacturers like BMW make huge profit on high end cars, to help with tight margins on cheaper cars. A friend of mine once said the material price of any car is within the £3000 to £20,000 range. But then you need to add on the cost of running the business, design, R&D, marketing, F1 etc.

The best way to work this out is to take Ferrari's profit and divide it across all the cars produced, but you would also have to take into account income from branding deals etc.

 

For dealers to stay alive , based on the limited of F car sales and the cost of running a business, I say they make 30k/car. I think Ferrari makes more on each car. My guess is 50k to 60k. I might still be lite. I have often wondered about this myself but what can you do with the market demand.

 

Dealer mark up is far lower than what you guess.

CW

 

Actual dealer profit on new cars in dollars is lower now than in the mid late 80's. Neither was as high as your guess. Out of FNA's share comes all warranty costs which can be considerable. That is why replacement parts are so expensive. That is the profit center for FNA.


Dealers need used car sales to survive if they are Ferrari/Maser only dealers. Used cars is where the $$$ is.

 

My guess on manufacturing cost of a F430 MSRP'd at 190ish would be less than $20K (parts & labor). This doesn't include R&D, or tooling equipment, etc. which lower the margin siginificantly more than the Cost of the Good Sold.

 

It is probably near impossible to calculate a manufacturer's cost as there are so many variables.

I would agree with Rifledriver that margins are now extremely low. I have been told that for M-B the gross margin is around 8%.

I recently saw an invoice for a 2006 911 Carrera S Cabrio at about $102K list. The gross dealer margin was about $10K, and with a $6K discount (yes Porsche discounted a new car!), the gross margin was less than $4K.

So, for sure it's hard to calculate.

Warranty claims are for sure the manufacturer's biggest cost and that has to be made up. As Brian said, parts and service to the rescue.

So, is there any doubt that dealers prefer to sell previously-owned vehicles?

I would bet that FNA makes far more per car than does a dealer, and the price differential on Euro models is a sure fire reveal of this.

 

Now you are catching on.

As I said though, warranty costs come out of that. Spa does not pay them.



Something people forget in the building of the cars, Ferrari although owned by Fiat has nothing to do really with Fiat auto. They are on their own so there is no economy of scale on their side. Parts and components bought from outside suppliers tend to be very expensive because the numbers of units purchased is so small. That has always caused the company problems and driven prices up.

 

I'd guess the cost on a 430 would be a LOT more than $20k for parts+labor. Just guessing from the prices of aluminum and steel, there is a lot of it in there. Add in carbon fiber, the electronics, and you're up there. Labor would definitely kick it above $20k, especially if you're counting labor to make the parts, not just labor to assemble.

The tooling/machinery makes up a large part but not as much as folks may think. A state of the art paint setup with robots that cost $30mm doesn't take a ton of Enzos, 430's, Maranellos and Scag's to make up the cost. When such equipment often lasts 10+ years its even less.

 

So did Malcolm Bricklin in 1974, only he wasn't a long-term player. He wanted to make a quick buck and lived off the fat of the incoming$ til it ran out.

I know this first hand, because I supplied all the steering wheels for all of the Bricklin production vehicles.

When Bricklin filed bankruptcy, only two companies were paid in full-Ford Motor for the engines and myself for the steering wheels. Ford had them on an L/C basis and I had them on a cash basis.

Hopefully all the current makers you listed will last but it's doubtful.

How about Vector? Tony2Ta says they raised $100 million and built some 16 cars! Where did all that $ go, eh?

 

Actually, I was referring more to the machines that have to stamp all the body panels, rather than a glorified paint booth.

Years ago I heard (and I doubt it's actually true) that the NSX costs Honda somewhere noth of 110K to produce. Maybe if one takes into consideration that they actually built a plant specifically for that car, and of course, the stamping machines for all the aluminum on the car.

 

I remember reading that the Bugatti Veryon costs less than it actually costs to "make" the car. But, if you neglected to take into account development costs, then the car would turn a profit, but not too large a one. I can imagine that the Veryon costs hundreds of thousands just to make, without any other costs factored in.